Founded in 1993 by brothers Tom and David Gardner, The Motley Fool helps millions of people attain financial freedom through our website, podcasts, books, newspaper column, radio show, and premium investing services.

How Evil Will Google Become?

Gbuy is soon to be thrust upon the world, but will it do what PayPal won't?

Maybe I've still got evil on the brain. A week after the rerelease of The Omen on the so-called day of the devil -- you know, 6/6/2006 -- I'm wondering when Google(NASDAQ:GOOG) will finally give in to its darker side.

June 28 may offer another temptation. That's the date an RBC Capital Markets analyst says the search king will launch Gbuy, an online payments service similar to eBay's (NASDAQ:EBAY) PayPal. The fear is that, with Gbuy, Google could get unprecedented knowledge of what we buy and where we buy from, which would then allow it to charge huge premiums for its most effective advertising tools.

That's a legit concern, to be sure, but it's not why I'm writing today. Instead, I wonder whether the Big Goo, as Foolish friend Seth Jayson calls it, will embrace another kind of evil: Internet gambling.

The answer matters more than you might think. PayPal, you see, doesn't accept payments from gambling sites. And that leaves millions of potential customers to other providers, including Neteller, a Pink Sheets-traded company.

Neteller is like PayPal in most respects, except that the London-based company specializes in processing online gaming payments. Poker sites such as PokerStars and PartyGaming's Party Poker offer good examples. And it's a big business -- Neteller processed more than $7.3 billion U.S. in transactions during 2005. That's a lot of, um, evil.

Can Google afford to ignore it? Calls to Google PR requesting comment were not returned by press time. Nevertheless, the company may not have much of a choice, at least here in the U.S. Congressman Bob Goodlatte, a Republican from Virginia, has introduced a bill in the House that would, if passed, ban money transfers for most forms of online gambling, including poker.

Still, any meaningful legislation could be months or years away. Meanwhile, PayPal remains the heavy in U.S. online payments processing, handling $9 billion worth of transactions in the first quarter. Reducing that edge won't be easy. History says that Big Goo's strategy will be to zig as PayPal zags, hoping to drag consumers along for the ride. And that makes sense. Too bad there aren't many ways to do online payments differently. Unless, of course, Google decides evil isn't evil after all.

High tech. Biotech. Nanotech. Any tech. David Gardner and his Foolish band of analysts cover it all forMotley Fool Rule Breakers. Ask us for anall-access passto the service to get a closer look at the four multibagger stocks the team has uncovered.Go ahead, you've got nothing to lose. Your pass is free and it's good for 30 days.

Fool contributor Tim Beyers thinks PayPal rocks. He's curious to see how Google will attempt to improve it. Tim owns shares of Neteller. You can find out what else is in his portfolio by checking Tim's Fool profile. The Motley Fool has an ironclad disclosure policy.

Author

Tim Beyers first began writing for the Fool in 2003. Today, he's an analyst for Motley Fool Rule Breakers and Motley Fool Supernova. At Fool.com, he covers disruptive ideas in technology and entertainment. Find him online at timbeyers.me or send email to tbeyers@foolcontractors.com. For more insights, follow Tim on Twitter.